The State of the Institute Forum - Susan Hockfield, L.Rafael Reif, Phillip Clay & Theresa Stone

HOCKFIELD: Good afternoon, everybody. Am I on? I am, great. I want to welcome you all to our annual State of the Institute. We started this a couple of years ago, and it requires some preparation. I have to say, I really do look forward to it. It's an opportunity for me, and the provost, the chancellor, and the executive vise president and treasurer to just give you an update on the current state of MIT.

We've got, I would say, good news to report. The bottom line is good news to report in a somewhat turbulent time. I just want to comment on the photographs you have been watching, which I find absolutely spectacular. They are all taken by MIT students, the technique yearbook staff photographers. And I just think they're absolutely fantastic. Another example of the extraordinary range of skills and talents of our undergraduates.

So I cannot begin without commenting that these are unsettling times. They're a little uncertain, and no doubt there is no one in this audience who is not aware of the major reorganizations of the financial institutional landscape that is unfolding in the markets even as we speak. No one can predict where we will be at the end of the week, never mind at the end of the month or the year.

And I just want to reflect that at a time like this, I would say even more so than in normal times, it's wonderful to be part of a place like MIT. The importance of what we do is only more important as the country and the world seek to solve the most pressing problems. We can help. And even in these times, and especially so, we have to remember MIT'S mission of service and our leadership on so many issues.

I'm acutely aware that leadership is important in good times and in bad, and this is a critical time for MIT to lead, to continue to set the standards for research and education, and also to set the standards for how we do our work. And I want to call out some of the characteristics of MIT that I've certainly internalized over the last four years.

We set the standards for I would say characteristic dedication to our work, for hard work, and for the integrity with which we go about our work. Our mission is to lead in service, in education, and research. And it's important that we call out those roles particularly now. Now, I am going to be focusing on our many strengths, and I would say only a few of our many strengths, some of the sources of those strengths. I have to apologize for those of you who are involved in important and strength building parts of the Institute that I just don't have a chance to touch on today. If I covered everything that was exciting me about MIT, we'd be here all afternoon. Not only would you miss lunch, you'd miss the rest of the day. So I will only highlight a few that have come to my attention, but it doesn't mean that those that I don't speak about are any less important or any less exciting.

I want to start with our finances, which is an area of understandable concern. The bottom line here, again, is that our finances are in really terrific shape. We have done a huge amount of hard work over the last two or three years to build a new framework that better harnesses all of our financial resources. And this work has happened in two different parts. And I will describe them very briefly. But it really is readjusting how we work on our operating finances and also coming up with new policy for how we use our endowment.

First, we have restructured our financial framework to optimize the use of-- or the balance between the use of our expendable and our endowed funds. This is a project that we've called rebalancing. It has been very hard work. It has been led by the provost Raphael Reif, the executive vice president and treasurer Terry Stone, vice president for finance Israel Ruiz, and lots of people and their offices, and lots of all of you. It's required work by the department lab center heads and AOs, and I don't know that we could count the number of people who have contributed to this. I want to thank you for coming together around an effort that has positioned MIT to face the future far more effectively than we have in the past.

One of the products of this effort over the last couple of years is that we are operating from a balanced budget in FY '09. This is the first balanced budget that MIT has had in many years. Now many people say, well, if we can operate in a balanced budget year or a non-balanced year, why should we care? And I respond that we should care deeply about this because a balanced budget means we can focus on the future. We don't have to worry so much about what happened in the past and worry about how we're going to recover from the past. For operating from a balanced budget, it provides us the strongest possible platform to imagine the future.

The second piece of this is that we've adopted a new endowment spending policy, the details of which you can find out if you need to by contacting us. But the basic message is this new endowment spending policy dampens the volatility. It will smooth the payout from the endowment, and it better balances the purpose of the endowment, which is to support the students, faculty, the research and education of today, and also preserve the value of the endowment for the future generations of faculty and students. Something we call intergenerational neutrality. We can't rob the future to pay for today, and we can't rob today to pay for the future. And getting that balance right is really important.

The reason why we have been so focused on smoothing the payout from the endowment is that the endowment now provides about 20% of our operating revenues for our budget. That's a big fraction. And if you look at how our operating expenses fall out, over a third of our operating costs are for people-- salaries, and benefits. And MIT is an organization that is first and foremost about people. Those people are all of you. And we want to be sure that we can steer a steady course. And to do that, we need a reliable and smooth payout from the endowment.

Speaking of the endowment, we reported some good news this week. The endowment returns for last year are 3.2%, that's the returns on the investment. Lots of the other institutions that we watch very closely have been announcing their returns also, and they tend to be in the single digits mostly clustering around the middle single digits like ours. But there are a few institutions, several institutions that have reported negative returns. This is a cause for concern. But I have great confidence that our investment office under the direction of our chief investment officer Seth Alexander is doing the best job they can, and certainly the returns this year speak to that.

As we look forward, I would say the stratospheric rates of return of the past are likely to be in the past for quite a while. And there are more difficult times ahead. But the work that I have described, both on our financial framework and in our endowment spending policy, position us in the strongest possible way to get us through even challenging times.

Many of you have asked me or one of us what our plans are to deal with the financial turmoil. And I would say no one knows what's going to happen. We're monitoring the situation very closely, but for now there's every indication that we are going to be able to stay the course with the budget that we laid out for this year. I think in good times and in bad, but I would say particularly now, watch watchwords are prudence and vigilance. But I know that's the way all of us operate anyway. They're particularly more important today.

So just to sum up this part, the changes in our financial framework and our endowment spending allow us to think about all of our finances, all of our financial resources comprehensively and fully integrate it in MIT'S decision making. And it really has happened, we've completed this work just in time to be in a strong position to weather rocky conditions that may lie ahead.

Let me talk a little bit about our continuing campus improvements. We have some new facilities coming along. Most of us encounter them as we walk around the massive construction. The sidewalk is closed here and you got to cross the street, or there's some-- a new mud puddle you've got to walk through. So I thought it would be important for you to actually see some photographs of what these construction sites are going to look like.

We have three buildings coming along. There's a Media Lab extension for the School of Architecture. MIT Sloan also has a new building, and the building in the middle is the New Koch Institute for Integrative Cancer Research. For the Media Lab extension-- which is a project with the School of Architecture and Planning-- and the MIT Sloan building, we have succeeded in a new approach to financing these magnificent new facilities. We have already raised 70% of the cost of these buildings of both of them, and we anticipate having raised 80% by the time we open those buildings.

Both of these buildings are going to provide really new opportunities, new intellectual directions. The Media Lab extension will provide in an environment that's going to link research and education in different forms of communication and in human augmentation, a very exciting set of projects. Among the groups that are going to be in this extension are the Program and Comparative Media Studies and the Center for Advanced Visual Studies. The Legatum Center for Development and Entrepreneurship, and the Okawa Center for Future Children.

The Sloan building is really going to transform space for the Sloan School. And it's going to enable the school to undertake 21st century business education and research, which has been very difficult in the spaces that they've been inhabiting. This 21st century approach to business education and research is increasingly group based, and it's increasingly tailored to specific needs, individual needs. We see that a lot in our executive education programs. And this building will facilitate those kinds of activities.

The Koch Institute for Integrative Cancer Research is a magnificent collaboration between the School of Science and the School of Engineering. It will house about 25 faculty members, about half from engineering and about half from science. This group is coming together to really change the frontier for cancer diagnosis, cancer treatment, and cancer prevention, and the excitement of these scientists and engineers working together is just almost indescribable.

Happily, we have had a very accelerated start on fundraising from our devoted and generous alumnus David Koch. David graduated from MIT with a Bachelor's degree in '62 and master's degree in '63, both in chemical engineering. David and his three brothers are all cancer survivors. So his involvement in this project is more than just, I would say, remote and theoretical. He is anxious to help us get progress in this area, as anxious as any.

I would say one personal word about David is any of you who have seen him or met him know that he's very tall. He was a basketball player at MIT, actually a star basketball player. He still holds the record for most points scored in a single game. I would throw that out to our students as a challenge.

[LAUGHTER]

I'm sure he would take it in exactly the right light if one of our current students was to best his record. I would say I've given you a very quick overview of these buildings. If you're curious to learn more about these building projects, you can go on the website, just go to the home page. And then at the end of our home page URL, /facilities/. There are beautiful descriptions and lots of detail about all three of these on that site. You go under the tab that says in development and construction.

Now speaking of raising money, which I have, I want to also report you on the extraordinary success of this past year. Resource development and the Alumni Association have had a banner year. There's been a huge increase in new gifts and pledges, an increase over last year of 27%. But it's the highest level for gifts and pledges ever in the Institute's history.

Now, while we often race to talk about the dollars raised in terms of dollars, the thing I watch really closely is participation levels. Because I view participation as a proxy for the enthusiasm with which our alumni and our donors-- the enthusiasm they bring to what we do at MIT. The senior gift this year is one example of that kind of enthusiasm.

When I arrived four years ago, the first class that graduated when I was here at MIT, the senior gift participation was 27%. I actually believed that our seniors were more grateful for their MIT experience than that 27% indicated, and I challenged the Alumni Association to work with the students, see if we could do better.

This year's participation of 64.4% is an Institute record, and it really does emphasize how our students appreciate the environment that we've provided for them. It's a way for our students to say thank you. And the people they're saying thank you to is all of you, because all of you have been critical in providing our students with absolutely the very best education and learning environment I believe anywhere in the world.

We will launch our campaign for students, which I hope you've all heard about on Friday. I'm going to come back to that in just a minute. Speaking of students, they are our most rich source of new ideas and new enthusiasm. We admitted this fall a new group of undergraduate and graduate students that are extraordinary. Extraordinary in their scholarship, and their talents, their skills in the classroom and outside of the classroom.

I would say undergraduate admissions this year was a bit challenging. A bit challenging because there were two things that changed in the environment. The first was that some of our peer schools-- Harvard, Princeton, and the University of Virginia-- abandoned their early admissions programs. This made it very hard for us to predict in any way what the outcome of our admissions was going to be with that variable thrown into the mix. And there were new, very aggressive financial aid practices announced by Harvard, Yale, and Stanford, and they accompany Princeton in very aggressive financial aid.

The bottom line on this year's admissions is that we did very well. And this is thanks, again, to the amazing group of people who work in our admissions office and our financial aid office under the brilliant leadership of Stu Shamil and Betsy Hicks. This year we had the highest number of applications in the Institute's history. It is the third year in a row that we have seen 8% or greater increases in application number. We had almost 13,400 young people applying for admission to be an undergraduate here at MIT. This produced the lowest ever admit rate, just less than 12% of the students who applied were admitted. The yield, despite these new variables, was very high at 66%, third highest in our history.

And the students, as I said, are brilliant. 91% of our freshmen graduated in the top 5% of their high school classes, 40% were the valedictorians in their high school classes, 24% are what we call academic stars. That means they've distinguished themselves in some kind of competition other way. They are brilliant and a delight to have join us on campus.

One of the things that I always want to keep in mind and I think all of us should keep in mind is MIT'S policies and practices for admission. We review the applications for admission in a way that is completely need-blind. The admissions office determines who should be admitted and who not to MIT without any regard to a student or a student's family to pay for an MIT education.

The financial aid that we provide is provided entirely need-based. So a student doesn't get financial aid because they're more meritorious in some way than some other, not because they're a good football player or a particularly phenomenal mathematician even. It's all need-based. And then we're committed to meeting the full need of all of our admitted students.

This means at the end of the day that 60% of our undergraduates receive financial aid from MIT and 90% of our students receive financial aid from any number of sources, including MIT. We have a group of students that we believe can make the best use of our intellectual resources, and we provide the financial resources to allow them to come here.

We're continuing our important progress to make MIT increasingly more affordable. This year for the first time, for all of our students who come from families with annual incomes of $75,000 a year and below, these students are attending without any need to take a loan to pay for tuition.

What that means is that among the students who receive financial aid, among the 60% of students who receive financial aid, the average tuition for that group of students is just about $8,000 a year, which is a very pronounced reduction from our standard which is now well over $35,000 a year. I have to remind you that even at full tuition, the tuition does not cover even half the cost of an MIT education. So through all the work that we do, all the financial work that we do, we're really providing an enormously important subsidy for education.

We remain committed to making MIT possible for all of those who can make the best use of our community, make the best use of our faculty, our staff, the other students, our phenomenal labs and other resources. The admissions landscape still has a lot of unknowns this year, and we're going to be monitoring the conditions and adapt as required. I have to share with you one story about a student.

As many of you know, last January we got a call from the Senate Finance Committee from senators Baucus and Grassley asking us to basically account for how we use our endowment in support of education. It was, I would say, not the most pleasant of experiences. The call went out to, I think, that the schools with the 100 top endowments in the country. So a lot of schools were scrambling to answer pages and pages of questions from the Senate Finance Committee.

I received a copy of a letter that was sent to the senators. And I want to read you from this. It was a letter from a father of an MIT student who's from South Dakota, who lives in South Dakota. And the letter begins by describing that he, like many people in that part of the country, comes from a family of modest means. And when his son came home from school one day and said that his ambition was to come to MIT, his father just said good luck, son. We can't afford it. So let me read to you from the letter that this father sent to senators Baucus and Grassley.

"The financial assistance we have received from MIT has been incredible, and I don't use that word lightly. In fact, the best offer we got from a state-supported school in South Dakota would have cost us more out of pocket than MIT does. Furthermore-- and I acknowledge the risk of perceived elitism here-- MIT is truly a world class university, one of a very few that truly have earned that distinction within the United States. What serious student would not want to attend such an institution?

Students who earn admission to MIT-- and the keyword there is earn-- show academic promise combined with the willingness to work for their knowledge. And the students I have met impressed me with their capabilities beyond standard academics. They are truly leaders in training in the sciences, mathematics, engineering, and other high demand areas.

These are the young men and women who, in the next 20 to 30 years, will be called on to maintain this nation's leading role in the technological world. It is an incredible honor for my son to be included in this group, and that honor would not be possible if not for MIT's financial assistance for its students." I couldn't have said it better.

Let me move on to make a few comments about teaching and research. It's what we do here. It's what inspires us. It is our mission. And of course, our faculty sit at the very center of our research and education enterprise. It's hard to describe just how brilliant and productive our faculty are. One way is to just pay attention to the awards they receive. It seems to me that hardly a week goes by when someone hasn't received some astonishing award. And in fact, just in the last week it was announced that two of our faculty received MacArthur Genius awards, and three received MIG Pioneer awards.

The MacArthur awards, our two are out of a total of 25 that were awarded across the world. And as I said, we know these as the MacArthur Genius Award. The Pioneer Awards, there's a new award from NIH. The three that MIT faculty received are out of 16 that were awarded across the country. And these awards, these grants go in recognition of exceptional creativity.

In the spring, several of our faculty-- five new faculty-- received Howard Hughes Medical Institute Investigator Awards, HHMI Awards. This is among the highest recognitions of achievement in science and also now in engineering. With those five new HHMI investigators, that brings the total at MIT to 19, which is more than any other institution in the country.

And I would say, well, all of this is wonderful. One of the HHMI investigator awards calls out what really sits at the center of what we do at MIT, and it's the integration of research and education. Professor of chemistry Cathy Drennan is one of our new HHMI investigators, but she previously had been recognized as an HHMI professor. HHMI professorships go to individuals who have particularly distinguished themselves in teaching and are shown a passion for innovative ways of conveying their subject in the classroom.

Professor Drennan is the only person in the history of HHMI to have received both an HHMI professor and investigator award, and I would say nothing could speak more deeply about MIT's commitment to the integration of teaching and research. There was yet another set of honors for Institute Professor Bob Langer, including the Millennium Technology Prize which is given for technology innovation.

Let me talk a bit about our strength and service to the world. This is part of our mission. The world is hungry for the kind of solutions that MIT provides. The MIT Energy Initiative, which is Institute wide, is just one example. Ernie Moniz has been doing a terrific job as director, and Bob Armstrong as deputy director. Every week there is a new breakthrough that I read about in the newspapers, and they come from every one of our five schools.

On campus, the Energy Initiative is taking form in the task force on campus sustainability. Terry Stone will be talking about that in her comments in just a minute. And one of the great achievements this year is that there's growing awareness of MIT's contributions outside of campus. The Economist in their June 21 issue had an entire section devoted to energy, and I would say almost every page mentioned something that came out of MIT. Not branded as such, but MIT was all over this particular issue.

MIT continues to have an important voice in DC, particularly around energy. There were MIT faculty witnesses on 23 congressional hearings on energy over the last year and a half. We have been very actively informing both presidential campaigns. Doesn't make any difference who's president, whoever-- I mean, in terms of what has to be done. What has to be done is we have built the base for innovation through research and education in the United States, and we have been giving material to both campaigns in this particular vein.

So as I travel around the country and the world, I'm struck over and over by how much the world looks to and trusts MIT. Trusts us for our expertise, for our technology breakthroughs, and importantly, for our role as an honest broker on really complicated issues. We're continuing to build academic strengths at MIT. Following on from the Energy Initiative, the provost announced last week a new Environmental Research Council, which will extend the Energy Initiative's work into broader issues in the environment. They'll speak to that later. And our school deans have been working in new ways, both within their schools and across the schools, and brought a really new level of excitement to MIT. And the provost will also talk a little bit more about that.

Diversity continues to be an important focus here at MIT. There is no question that we need the contributions of all who want to participate in a science and technology centered enterprise. We can't leave out the women, we can't leave out the minorities who want to be part of this work. We need all the strength we can get. You know, at MIT we don't actually need to talk about excellence of the highest caliber as we admit students, as we bring in faculty, as we hire staff. It just goes without saying. And we would hope that at some point, a diversity goal would be similarly internalized.

There's lots of important work going on. I can't list all of the activities, a few are on the screen. Last year was our first with our new associate provost for faculty equity, Institute provost Barbara Liskov serving mainly issues around women, and Professor Wesley Harris serving in issues predominantly around minorities. But the two of them are working very closely together and with our faculty.

I want to call out one upcoming event, it's the Diversity Leadership Congress that will be held November 18th. The purpose of the congress is really to spread the mantle of leadership more broadly through the Institute. We will gather together about 300 of the academic, administrative, and student leaders. Their role is to participate in the conversation of the congress, and then to bring what they learned at the congress back to the people they work with and talk to.

The goal is to widen and strengthen leadership for this key issue. And the Congress is going to provide an opportunity to find out from others who have been key protagonists, key helpers in diversity issues at other places to find out from them what's worked and what hasn't worked, and then for all of us to work together to build approaches that are truly worthy of MIT. What's important for everyone to understand about the Diversity Leadership Congress, it is a conversation and a planning session. It's an opportunity to together understand what's possible and how we can accelerate our progress.

Let me close by returning to our students and how we're building strength for them, and through that, through our students, building strength through the world. I want to start with a short video clip from some of the materials that we've assembled for the campaign for students. Let's watch the video.

[VIDEO PLAYBACK]

- I was interested in what drives personal happiness. How does working on challenging technical problems propel a person, and motivate a person, and make them wildly happy to be alive?

- What I've learned at MIT, that we can listen and learn as much as possible from other people and their experiences. Doing things that are not selfish or self-centered in nature, but doing things that are really to the benefit and service of all humanity.

- I really like biology because there's a good chance that you'll be helping people. If not in your lifetime, the research will be helping people sometime in the future. You can see where it's going.

- Ultimately I want to be able to help any sort of individual who actually suffers from these sort of behavioral disorders, because ultimately they are absolutely devastating.

- I want to help people. Building a device that's going to save lives, I never imagined I'd be doing that. The dedication of our excited engineering work has that kind of direct benefit? That's perfect.

- I grew up to love cycling because it epitomizes everything else in my life. It's this constant struggle against yourself to be the best person that you can be.

- How do we not just limit the bad things, how do we really create true value, wealth, happiness, joy, peace? What does it take? What do you do if you want the world to be awesome? You know, how do you spark that? How do you make that happen?

[END PLAYBACK]

HOCKFIELD: Our students. I find this-- I've watched this movie so many times, I can't tell you, I find it enormously, enormously moving. It's easy to get excited. If you want to see more of these video clips, you can go on the web at thehumanfactor.mit.edu. As I said, the campaign for students will have a public launch on Friday. This is designed as a birthday present for the Institute's 150th birthday in 2011. We've already raised more than 55% of our goal to raise $500 million. Chancellor Phil Clay is the Institute leader of the campaign, and he'll say more about it in just a few minutes.

I want to talk about the spirit of this campaign. The spirit really is about our leadership in good times and bad. It's about building a strong foundation that the future requires. It's about building fundamental growth. In the United States, fundamental growth stems from innovation. And driving the innovation economy that has so benefited this country requires sound policies and absolute commitment to education and research. This campaign, the campaign for students-- and indeed, everything we do at MIT-- is about accelerating these important advances by unleashing the unlimited potential of the human factor.

So MIT has strengths in many areas, and I want to close with just one last piece of evidence, as if you needed any more. I'm going to read from a letter from a grateful scholarship student, one of the 60%. To the donors of the scholarship fund, this was a fund that was given to us by Dick and Ginny Simmons who are among our most generous supporters. You can see them here with their students. Their generosity you can see all over campus in what they've done in the past, but currently it's in evidence in the renovation of Vassar Street West. I mean, what spectacularly committed and devoted donors we have to help us repair a road. That's really dedication.

Any case, the letter from the student begins with an account of his freshman year, which included starting a business with four other students, a trip to Mongolia to study the emerging coal mining industry, and to work with One Laptop per Child, and then he closes with a description of a meeting with his friends after final exams.

Present were three Iranians, two Indians, a Pakistani, three Americans, including myself, a Haitian, and a Chinese. One of the Iranians wrote some of the code for the robotic spacecraft that recently landed on Mars. The Haitian won last year's 200k business competition for his team's development of a low cost, high efficiency water purification system for use in developing countries.

The Chinese fellow runs a small but rapidly growing venture capital firm focused on student startup companies in China and the US. The Pakistani is one of the top theoretical physics majors at MIT, attending on a full scholarship. Looking around that gathering, it was clear to me that the diversity of the attending group was rivaled only by the motivation and innovative capacity of its members, a circumstance which I think fairly well sums up MIT in general.

What can I add? That's why we're all here and what keeps us working so hard to make this the best possible place for education research. There are challenging times ahead to be sure, but we will work together to face them, to adapt as conditions require so that we can continue our important service to the nation and the world. Now we're going to hear from the provost, the chancellor, and the EVP and treasurer, and then I hope we'll have time to take questions. Next up is the provost, Raphael Reif.

[APPLAUSE]

REIF: Good morning. Audience, I think I need some help. Good morning.

AUDIENCE: Good morning.

REIF: That worked. My remarks today contain a very simple message, and one that I will summarize for you right away. MIT is terrific shape. In my opinion, this period of time, more than any other in MIT's history, belongs to MIT. I will explain now why I'm so confident of this statement.

What defines a great university today? In addition to educating outstanding students, a great university creates knowledge in the most important scientific challenges of the day, applies this knowledge to solve the most important problems, and then enables the transfer of these solutions to the commercial sector.

What are the most important scientific challenges of today? The answer is relatively obvious. Energy, environment, poverty, health, cancer, technology, design, innovation, finances, and the list goes on. Why is MIT in terrific shape? Because in all these areas, MIT is creating knowledge, applying it to solve important problems, and transferring solutions to the commercial sector. In short, MIT faculty, staff, and students are leading and pioneering in all these critical areas.

That's why resolved, smart individuals are attracted to MIT to be part of a community that wants to make a difference. A unique feature of the MIT community is the way it goes about working on important problems. MIT operates as a single community, where for example, researchers from one department collaborate with scholars from other departments or schools. In CSAIL, for instance, computer scientists collaborate with engineers and with math researchers. In CMSC, chemists, physicists, material scientists, and engineers collaborate with each other.

Working in areas that matter as a single community and creating new knowledge, disciplines, and curricula has been the hallmark of MIT. Today, this way of doing things is sometimes referred to as inter-disciplinary. And many academic institutions are trying to figure out how to do this successfully. MIT has been doing it for over 60 years, starting with the creation of RLE, our research lab of electronics, in 1946. Since then, RLE physicists and engineers have carried out pioneering interdisciplinary research.

Our model of education and research, our focus on science and engineering, and our hands-on practical approach to solving the world's most important problems have never been more relevant or more important. This is why I can state with confidence that this period of time belongs to MIT.

Let me now give you some more specifics. At MIT, each of our five schools is a leader in what they do, and each school benefits from the presence of the other four leading schools. In addition, our schools have benefited from MIT's unique science and technology focus.

Our collective goal is to continue to be the institution that attracts the best and the brightest. That is why since early this year, our five schools have been engaging on what we are referring to as a visioning exercise. Each school is examining what they do and defining their vision as an MIT school and as a leading school in academia.

There is not enough time for me to share with you all that the deans are doing, thinking, and planning, but I will try to give you just a few samples. Researchers in the School of Engineering are figuring out how to build electronic gadgets such as cell phones and PDAs that do not need batteries. Their goal is to develop electronics that can be powered completely using scavenged energy. For example, using vibrations or body heat to power electronic devices. Their research involves developing micro generators as well as electronics that consume minimal amounts of energy.

This group is working on an energy processor that can convert vibration energy to electric energy. This research will enable a number of self-powered microsystems such as implantable medical devices that can be powered indefinitely. If you want to know more about this work, check the website of the microsystems technology laboratories.

In the school of science, some of the most exciting advances involve the convergence of the life sciences with the physical sciences and engineering to understand, diagnose, and treat diseases. For example, in cancer research rapid sequencing at the Broad Institute has identified new genes, and the Koch Institute is bringing together life scientists who study the biology of cancer with engineers who are finding new techniques for detection and treatment. In addition, neuroscientists, cognitive scientists, and engineers are doing similar breakthrough research in brain disorders such as autism and Alzheimer's.

Schuss is planning an exciting global studies program for undergraduates. The program would offer undergraduates the opportunity to study the subject of their major-- usually science or engineering-- simultaneously with a deep study of a particular region of the world. These global studies scholars would work closely with their advisors and with faculty from all five schools who are interested in the same region. Students would study language as well as the literature and social sciences of their chosen regions. This academic work would be supplemented with co-curricular activities such as [INAUDIBLE] internships, [INAUDIBLE], and other international programs.

MIT Sloan just launched a master of finance program. Recent events in Wall Street suggest that the world's financial system needs the kind of business leaders that MIT uniquely develops with deep knowledge of uncertain complex systems. In addition, faculty members at MIT Sloan are conducting research on sustainable economic development. This includes an understanding of the technological, economic, and social dimensions of energy capacity, greenhouse gases, green manufacturing, and sustainable human capital.

Finally, researchers in the School of Architecture and Planning have traditionally focused their attention on the needs of the disadvantaged. An example of this is the multimedia large scale projection called Veterans Vehicle Project that gives voice to veterans who struggle with homelessness. More recently, researchers at the Media Lab initiated a Center for Human Augmentation. The goal is to develop new technologies that enhance and extend human capabilities and overcome human disabilities. A specific example is the powered ankle foot prosthesis that is transforming the lives of leg amputees.

In addition to these very brief academic nuggets from our schools, all of them are strongly committed to increase the diversity of our faculty, staff, and students. I trust you agree with me that MIT's academic programs are in great shape. Yet I'm sure some of you are asking yourselves, how are we going to be able to continue to implement our goals in the present financial climate?

Let me answer with the following. As President Hockfield said in her remarks, the general Institute budget-- what we call as the GIB-- for this fiscal year is balanced with no deficit. It is the first time, as President Hockfield said, in many years that MIT enjoys a balanced GIB. This has been the result of the hard work of many dedicated staff and faculty leaders at MIT. It is a remarkable feat and a major accomplishment, and I expect the Institute to benefit from this position for years to come.

A balanced budget allows us to take the time to understand any possible impact the financial markets may have on MIT. As right now, it is too early to tell. It is important to state at this time, however, that MIT's most important asset is the people of MIT, and MIT's most important commitment is to its people.

Before I conclude, I would like to add a couple of recent faculty activities. It is extremely important to bring our faculty together to address our most complex challenges. President Hockfield already mentioned the Environmental Research Council. Let me mention three other recent faculty committees that have been convened.

Earlier this month I announced the creation of an MIT global council chaired by Professor Richard Samuels and Professor Dick Hugh. The formation of this council is a recognition that we are all interlinked in a global marketplace and that we need to educate our students to compete and succeed in this global environment. The council is charged with developing a long range plan for the creation of an undergraduate educational program such as the global studies program I mentioned earlier.

Two additional ad hoc faculty committees were created as a result of the increased complexity of our research enterprise and our tech transfer activities. One of the committees is focusing on managing potential conflicts of interest in research. The chair of this committee is Institute Professor Sheila Widnall. Their primary focus includes a review of activities that could give rise to conflicts of interest and examination of our existing policies and procedures, and a review of what we do today to monitor possible conflicts of interest. The committee is expected to recommend possible changes to our policies and procedures.

The other committee is focusing on MIT Technology transfer for the 21st century. The chair of this committee is Professor Charlie Cooney. The primary focus of this committee includes exploring ways to accelerate technology transfer and review principles that govern our industrial engagements.

Whether it is launching a new academic program, or making a new discovery, or launching a new initiative, or transferring technology that will revolutionize an industry, the success of each of these efforts depends in great measure on the people in this room. As President Hockfield noted in her remarks, the only limiting factor in what we can achieve together is the human factor.

MIT is about the people of MIT. I started telling you that this time period belongs to MIT. I explained that this is so because of the work we do and the way we do it. But MIT's success is primarily due to the people of MIT. I've had the opportunity to work directly with many of you. I'm proud of working with you and I'm proud of what all of us have accomplished together. Let's remind ourselves of the tremendous legacy on our collective shoulders, the legacy of working at one of the best education and research institutions in the land. Let's work together to make the following statement a reality, MIT's best years are yet to come. Thank you.

[APPLAUSE]

Now my dear colleague, Chancellor Phil Clay.

[APPLAUSE]

CLAY: Good morning.

AUDIENCE: Good morning.

CLAY: There's still some morning left. I want to first of all say how pleased I am to report on the state of the Institute as regards education and student life. I share Raphael's view and Susan's view that we are in very good shape, and this is very encouraging as we move into a difficult economic period as well as a very hopeful exercise with our alumni and friends in raising support for the Institute.

Our mission is to provide the resources and support to students in their journeys of discovery and intellectual and personal development. And in campus life, we seek to ignite creativity and leadership in service because these are the activities on campus that will allow our young people to go out with great confidence-- not false confidence, but grounded confidence in what they know and in what they can contribute.

Against a goal we have, we've come a long way in the last few years. The MIT of today is better than the MIT that any of us attended as alumni, and we have made steady progress. We recognize the challenges that remain. We are positioned to perform against our mission and to perform well. I'm positive that we are on the right track.

I'm particularly noting today that we have made a number of efforts over the period of the last 10 years-- that is, since the task force on student life issued its report in 1998-- to improve student life. Faculty, staff, and students have made many contributions over this decade to achieve the goals set forth in that report.

Each year we made progress, and this past year has been no exception. We also note that the faculty task force on the education commons continues to have insight about how we advance and improve our educational offerings. Some of the work for implementing the recommendations of that task force have already been taken, and the faculty continues to wrestle with other aspects. And we hope that wrestling will come to an end this year.

The class of 2012, by every measure-- grades, test scores, diversity, accomplishments that they bring with them to this campus in the arts, leadership, and public service-- is the best ever and is without peer in talent or promise. The number of applications, as President Hockfield identified in her report, all of these indicators are positive, as well. But I want to report based on conversations with students and families that the students have come here with a great deal of enthusiasm and continue to have it, not just those who came here in September, but those who are proceeding through their undergraduate and graduate careers, as well.

Now, you will recall last spring that there was some worry that the more generous aid offered by some of our peers would have an adverse effect on our enrollment goals and on our diversity, economic and otherwise. Now, we expanded our support almost 10% and did a number of things that were very creative so that our final enrollment this year is as strong as it has ever been. Now, we are mindful, as we will discuss in a moment, that we will continue to have challenges and that we will work very hard to meet those challenges.

We learned in the process that we're on the right track, but we also learn that each year there are new challenges and we will wait for what the challenges are this year for enrolling our next class. You'll also note that in the recent rankings, MIT and many of its departments and schools continued in their usual leadership status. It's true for MIT as a whole, and as Rafael indicated, it's true for our departments in all five of our schools.